PROBLEM 2
a. Modern Medical Devices has a current ratio of 0.5. Which of the following actions would improve
(i.e., increase) this ratio?								0.5	1.2
- Use cash to pay off current liabilities.
- Collect some of the current accounts receivable.
- Use cash to pay off some long-term debt.
- Purchase additional inventory on credit (i.e., accounts payable).
- Sell some of the existing inventory at cost.
b. Assume that the company has a current ratio of 1.2. Now, which of the above actions would improve
this ratio?